While out shopping, we see vertical integration at work in many different stores. An example of vertical integration is when retail companies take control of more than one aspect of the supply chain. To break it down even more, the store brand becomes the producer, the wholesaler and the retailer of a product. This happens in retail many times when stores have their own exclusive brands and sell these at a lower price against national brands
The benefits of vertical integration are not just lower prices for the consumer, stores benefit by having greater control over the supply chain and lower variable production costs. But vertical integration does not come without its costs and hardships for a company – the store must take into account that entering a new line of work requires a new set of expertise to complement their existing business.